World Bank raises $91m in new green bond linked to ethical equity index

Innovative retail offering tied to Solactive’s Ethical Europe Equity Index

The World Bank says it has raised a total of $91m (€77m) via an innovative green bond issue linked to an ethical index from German index firm Solactive.

The bank said the subscription period for its Green Growth Bond – the first green bond linked to an equity index designed for retail investors in Belgium and Luxembourg – closed last week.

Solactive’s Ethical Europe Equity Index was launched in April 2013 and features 30 European companies, advised by France-based ESG firm Vigeo and certified by Belgian consultant Forum Ethibel. Constituents must have no major involvement in weapons, gambling, tobacco or nuclear power.

The subscription period for the bond lasted six weeks to December 29 and was re-opened on January 7 to “satisfy investor demand”.

“There was strong appetite from investors, with the minimum issuance target of $15m reached in the first three days of launch,” the World Bank said in a statement, adding it was the largest public offer subscription for a non-Euro denominated equity index-linked bond across Belgium and Luxembourg in 2014.The product was developed with BNP Paribas Corporate & Institutional Banking and 10 banks distributed it (BNP Paribas Fortis, Fintro, Puilaetco Dewaay, Belfius, ABN Amro, KBC, CBC, Bolero, Banque Degroof and Fortunéo Banque).

“This offering marks the first time equity index-linked World Bank Green Bonds are accessible to retail investors and we are thrilled that the bonds met with such success,” said Doris Herrera-Pol, Head of Global Capital Markets at the World Bank.

The demand “points to continued trends in the responsible investing space” added Renaud Meary, Global Head of Structured Equity at BNP Paribas.

The bond was announced on November 17. It was designed to offer “three key objectives for the environmentally conscious investor” – namely eco-citizenship, peace of mind (at maturity, investors are entitled to the repayment in US dollars of 100% of their original capital) and return on capital. At maturity, investors can potentially earn a redemption premium that is linked to the index. The minimum investment was £100. The bond has its own dedicated website, here.